The term Accounts receivable generally denotes all claims involving a future inflow of cash (You will receive cash from these accounts). These receivables result from business transactions involving sales of goods and services, loans, and miscellaneous claims. The accounting procedures surrounding the creation of receivables as well as the controls over the credit granting function and the collection process are, therefore, of considerable importance. usually, the financial statement uses the A/R term to replace of accounts receivable .  Debtors are the common part of accounts receivable in any business. Trade type Trade accounts receivables represent the sale of goods and services in the normal course of business operations and account for the major portion of a firm's revenue-producing activities. The open account or trade account, created by a transaction between business concerns is generally unsecured (an informal a...

A little more than a decade ago, most basic accountancy was carried out using a pen, fifteen-column ledger, and calculator. Arguably, trainee accountants learned the nuts and bolts of double entry far more effectively in those days by manually recording bank transactions, year-end journals such as depreciation and accruals, and opening balances, arriving at an extended trial balance which formed the basis of the final accounts.   Software such as Auditman began to ease the preparation of the final accounts as the trial balance figures, having been produced manually, were entered and converted into a format in line with the requirements of the Companies Act and Accounting Standards, but not until the mid to late 1990s did it become economic to have a computer on every desk. As this began to happen, manual bookkeeping became for many people a relic of a distant era; though, as Thomas Hardy wrote in The Mayor of Caster-bridge, 'as in all such cases of advance,...

It is political and arise with the disclosure of financial misdeeds by trusted executives of corporations or governments. However, accounting scandal will describe such misdeeds typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of corporate assets, or under-reporting the existence of liabilities, sometimes with the cooperation of officials in other corporations or affiliates.      The year 2001 witnessed a series of financial information frauds involving : Enron Corporation Arthur Andersen (Auditing firm ) WorldCom (the telecommunications company) Qwest and Sunbeam  Among other well-known corporations These problems highlighted the need to review the effectiveness of accounting standards, auditing regulations, and corporate governance principles. In some cases, management manipulated the figures shown in financial reports ...

Debit & credit words are formal bookkeeping & accounting terms. They are the most fundamental concepts in accounting software and bookkeeping applications that represent the two sides of each individual transaction recorded in any accounting system and accounting application. A debit transaction indicates an asset or an expense transaction, and a credit indicates a transaction that will cause liability or a gain. A debit transaction can also be used to reduce a credit balance or increase a debit balance. Example of Debit & Credit in a journal entry Please look at a sample journal entry in the accounting software as below: in this journal entry, Jack should pay 1200 $ for rent, then we put this money in the column debit for his account and in the credit column for income account (Property rents). Note: here Jack didn't pay the rent yet. A credit transaction can be used to decrease a debit balance or increase a credit balan...

Bookkeeping Concepts This is a very basic but very important question, and it deserves a very basic but important answer. The following is taken from the first page of the first chapter of Bookkeeping by Andrew Lymer and Andrew Piper in the Teach Yourself Series published by Hodder Education.  What is bookkeeping? The process of correctly recording in Books of Account cash, credit and other transactions. What are Books of Account? The primary Book of Account is called the ledger, so called because all transactions, after first being recorded in subsidiary books, are afterward grouped or summarized in accounts in the ledger. Why should goods or services be bought or sold on 'credit'? Almost all business dealings are conducted on a credit basis to avoid the inconvenience and danger of carrying large amounts of cash. The supplier of goods or services is us...

First of all, let's see why there are different types of the ledger in accounting. then we show you the types of the ledger in accounting. As you know, in any business move of cash is the most important transaction and there are different types of transactions for cash flow so it needs different types of ledgers to record them. The nominal ledger is the heart of any accounting system The structure of accounts in the nominal ledger book is the most important concept. A perfect structure of ledgers could be a golden way to have an elegant accounting data entry. There are some important types of the ledger and some low priority types in the ledger book, so it is a benefit to put important accounts in the first layer and put other priorities in the second and next layers of accounts in the ledger book. MAIN LEDGER All ledger books are grouped under the main ledger book. The nominal ledger book is the main ledger book that covers all ledgers book in itself. So...

In commercial financial operations, the accrual method of accounting is used because it reflects fully the earnings process of the financial operation . Accrual accounting matches revenue and expenses and reports the results of operations and financial positions in a way that permits the assessment of management's accomplishments.  The basis of accounting for the governmental funds within a state, county, or local government unit is not how much was earned and the number of expenses. Instead, the emphasis in these governmental funds is on reporting how well the government performed by focusing on when the revenue and expenditures are recognized in the accounts and reported in the financial statements.  The reason for this is due to the nature of government activities: except for the proprietary funds and some trust funds, governments do not try to earn income. If the resources received are not expended, then the citizens have not received all the services the government could ...